MTN raises R14bn in one year from sale of noncore assets
Africa’s largest mobile operator, MTN, on Thursday said it had raked in as much as R14bn in 2019 through the sale of noncore assets as part of its effort to raise R15bn in three years.
The group announced its asset realisation programme in 2019, which aims to simplify its portfolio, reduce debt and risk and improve returns.
“Following the completion of these transactions, MTN will have realised proceeds of approximately R14bn within the first 12 months of this programme,” said group CEO Rob Shuter. “Realising proceeds from simplifying the group remains a major strategic objective and we expect further progress in this programme in 2020.”
Following the disposal of its stakes in travel technology company Amadeus and online travel booking platform Travelstart, and the ATC loan of R2.1bn earlier in 2019, MTN said it has concluded two further transactions.
The operator has concluded an agreement to dispose of its 49% holding in Ghana and Uganda Tower Company investments to a subsidiary of American Tower Company for $523m (R7.3bn). This transaction is expected to wrap up in the first quarter of 2020.
Additionally, the group said MTN Nigeria has completed the redemption of its preference shares with MTN Group, receiving $315m (about R4.4bn) in December 2019.
In its push to shed noncore assets, MTN has previously indicated that it will dispose of its stake in Africa’s largest online retailer, Jumia, which listed on the New York Stock Exchange in 2019.
MTN said it will dispose of its stake in Jumia, which is valued at $514.06m (R7.24bn), when the time is right as the company's stock has so far faltered in US equity markets. After rallying as much as 224% in its first month of trading, the share price crashed 85% from its peak in May 2019 after a report by Citron Research released soon after the listing accused Jumia of fraud and described the company as “worthless”.
Now trading at $6.73 (R94.83) a share, the Nigeria-based business is trading well below its $14.50 (R204.31) opening price in April.
MTN’s share price was trading 1.47% higher in late-afternoon trade on Thursday at R83.70, despite revelations earlier in the week that the mobile operator was facing a lawsuit brought by attorneys representing US service members and contractors killed in Afghanistan. They are seeking damages as a result of the company allegedly violating US antiterrorism laws, saying the company paid “protection money” to the Taliban to secure its own infrastructure.